Judge approves wording settlement for hotel tax ballot measure

SAN DIEGO - A judge Wednesday signed off on a settlement between
San Diego and opponents of Proposition J, over language in the Nov.
2 ballot measure aimed at raising the local hotel room tax from
10.5 to 13 percent.

The settlement, agreed to by the City Council in closed session
yesterday, removes wording in the city's fiscal impact analysis
that suggests money raised by Proposition J would be earmarked for
public safety.

If approved by a majority of voters, J would increase the city's
Transient Occupancy Tax and raise about $28 million annually for
the city's General Fund. The measure does not specify where the
money would be spent.

No on Proposition J, a coalition funded largely by the local
hospitality industry, sued the city on Aug. 27, arguing that the
analysis City Manager Lamont Ewell prepared was misleading to
voters.

Hotel industry officials are opposed to Proposition J because it
does not allocate a percentage of the money to promote San Diego
tourism, which they maintain was the intent of the original
TOT.

"We are pleased that the city's fiscal impact analysis will
provide voters with the simple truth that revenues from the City
Council-sponsored tax hike proposed by Proposition J would go into
the black hole of the general fund," said No on Proposition J's
Mike McDowell.

"Proposition J allows councilmembers to use this tax hike for
any purpose they desire," he said.

The sentence removed from the analysis stated that "this
additional revenue will be deposited into the city's general fund,
and may be used for general government purposes such as public
safety, parks, libraries and promotion of tourism in San
Diego."

Deputy City Attorney Rick Duvernay said the dispute over the
language in the analysis amounted to "minor nitpicking," and a
battle would not have been "worth the tax dollars."

Because the measure is a general tax increase - with no specific
percentage of the revenue dedicated for a specific purpose - it
requires only a simple majority of votes for approval.

Had the City Council advanced previous proposals to earmark the
money, it would have taken a 67 percent passage rate for
approval.

Nearly 62 percent of the voters in the March primary election
supported a similar measure, but as a special tax it fell short by
5 percent.